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California’s budget deadline doesn’t work the way voters think

The California legislature on Monday approved a $ 264 billion state budget proposal, sweeping legislation to spur the state’s COVID-19 recovery and comply with a state constitutional mandate that Lawmakers either pass a plan by June 15 or waive a portion of their salaries.

But that won’t be the final budget for the fiscal year that begins July 1.

The longest-serving member of the Legislative Assembly, State Senator Jim Nielsen (R-Red Bluff), publicly reiterated what budget analysts and lawmakers know: the bill is largely a placeholder , not the finished product voters might have expected.

“It’s a bogus budget,” Nielsen said during the Senate budget hearing on Monday. “It’s a wellness budget, a ‘let us get paid’ budget. But what we are voting on will not be the budget.

Nielsen’s words were somewhat hyperbolic – the proposition is hardly “false” as a number of provisions in the 920-page bill align with Gov. Gavin Newsom’s budget preferences and will almost certainly appear in the plan. final. The governor and Legislative Democrats are backing record spending on public schools, new stimulus payments for millions of Californians and expanded government services funded by a tax windfall of some $ 76 billion.

The underlying point of Nielsen’s criticism, however, seemed reasonable: How can the budget meet the deadline if it is not yet complete?

The answer hinges on the expectations set by Proposition 25, a 2010 voting measure approved by voters in the wake of arguably the worst decade of governance in California history. In nine of those years, the state began the fiscal year on July 1 with no budget in place. In 2009, a bitter standoff over a large projected deficit forced officials to sell IOUs to cover state government bills.

The latest budget in state history was enacted just three weeks before voters approved proposal 25.

In doing so, they removed the most obvious obstacle to speedy passage of the budget: a 1933 constitutional provision that required approval by a two-thirds vote in each legislative chamber. Over the decades, that meant at least a handful of Republican lawmakers had to sign, even as two-party politics faded in the 1990s and 2000s.

But previous efforts to allow the adoption of a state budget by simple majority had failed. So supporters of the 2010 effort added political sweetener to “hold lawmakers accountable for late budgets,” as a Proposition 25 spokesperson put it in a television commercial. In the same advertisement, a slogan subsequently flashed on the screen in capital letters and in bold: “NO BUDGET, NO PAY. “

Lawmakers would lose all salary and expense payments for each day after June 15 that the budget was not passed, using a long-standing constitutional deadline that had been consistently ignored.

If one-off budgets were the goal, Proposition 25 worked.

California has started every fiscal year since its passage with a budget in place. Because Democrats maintained large legislative majorities and have always served as governor, they were able to draft spending plans without Republicans approval. Budget negotiations in Sacramento have become more of family disagreements than the political brawls of the past.

Perhaps more importantly, the California economy has consistently produced more than enough tax revenue to pay the bills for most of the past decade. As lawmakers have argued over where to spend the money, debates are less caustic than in years past over where to cut.

“What we are facing today is that we are in an unprecedented position to make transformative investments,” Senator Nancy Skinner (D-Berkeley) said during the budget debate on Monday.

But in some ways, the ballot measure that created a firm deadline for the budget to pass also made the deadlines less significant.

In six of the 10 years since Proposal 25 came into effect, including this year, lawmakers have failed to finalize the budget by the June 15 deadline. Subsequent details were then conveyed through the use of budget “follow-up invoices,” a nickname meant to indicate that each proposal is legally linked to the main spending plan.

But the connection can be tenuous at times, with a trailer bill including meager credit that counts against the budget.

“For better or worse, trailer bills end up making a number of policy changes that may or may not be directly part of the budget itself,” said Chris Micheli, a longtime lobbyist.

Partisan politics is at the heart of one of this year’s budget bills, a proposal introduced last week that will see Democrats speed up an election in which voters decide to remove Newsom from office. This change in the electoral process can be made as soon as Newsom signs the bill, possibly by the end of the month.

Legislative records show Democratic lawmakers introduced 176 bills between the two chambers in January that could be used as trailer bills until next summer.

“The budget process has now become a sessional affair with very little transparency provided to the public,” said Senator Melissa Melendez (R-Lake Elsinore).

Chris Hoene, executive director of the California Budget and Policy Center, said it was no surprise that the June 15 deadline did little to flesh out the state’s ultimate budget needs for the current fiscal year and that which begins July 1 – during which resources and needs have been complicated by the COVID-19 pandemic.

“The scale of what’s left is so much bigger” than most years, Hoene said. “There just hasn’t been that much time to put the details into place. “

Even so, legislative leaders know that the only legal requirement is the one they crossed with Monday’s vote.

Tuesday marks the 10th anniversary of the first and most important test of the powers of the legislature under Proposition 25. In 2011, then-Gov. Jerry Brown vetoed the budget sent to him by his fellow Democrats, calling the spending plan “unbalanced.” A week later, then-comptroller John Chiang said he would withhold statutory salary accordingly.

Courts have ruled that Chiang has overstepped his role and that lawmakers have done exactly what voters told them to do under Proposition 25.

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